True value-based care is a trillion-dollar unicorn for the health care industry

In Silicon Valley, Kendall Square, and points in between, unicorns are more than mythical creatures that adorn software engineers’ ironic T-shirts. They’re disruptive technology behemoths with billion-dollar-plus valuations. These beasts have largely shied away from the health technology sphere over the last decade, despite many promising upstarts. Maybe we’ve been hunting for the wrong kind.

Get ready for the uber-unicorn. It won’t be a single, enormous company with a trillion-dollar valuation. Instead, it’s a movement called value-based care.

Value-based care isn’t a new concept. But it’s been used a bit bashfully, traditionally referring to carrot-and-stick-based incentive payments and penalties for physicians. Today these pale in comparison to the fee-for-service care that rewards reactive, episodic, paternalistic care — and lots of it.

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Here’s what I mean by true value-based care: fully capitated payment contracts in which a lump sum of money is available to treat a patient over the course of a year. No penalties or incentives, simply ownership of the total cost of care and the total cost of outcomes. The better the care, the more money the organization bearing the risk receives. This is how to best reward exceedingly efficient, effective health care.

These arrangements are now gearing up to provide a runway for value-based care to swiftly take off in the now ubiquitous hockey stick trajectory that just wasn’t imaginable a year ago.

Proof positive

A significant barrier to adopting value-based care has been lack of proven methodologies. That’s now largely been answered by models of care grounded in behavior change. Randomized controlled trials that my company, Twine Health, conducted with Massachusetts General Hospital and Joslin Diabetes Center showed a dramatic reduction in the total cost of care for people with high blood pressure and diabetes while generating exemplary outcomes. In just three months, trial participants had an average 26-point drop in blood pressure and a 3.2-point drop in hemoglobin A1c (a measure of blood sugar control) at one-third less cost.

By reducing the cost of treating patients with chronic conditions by one-third, value-based care could shave nearly a trillion dollars off the bottom line, provide a substantial downstream benefit from healthier patient populations, and add hundreds of millions of years of healthy life.

And now there’s a model to do it.

Uplift primary care

It’s a nearly universal conclusion that the only way to control ever-expanding costs is to shift the locus of care to primary care with the fervor that was once reserved for building large, expensive surgery centers. In value-based care, preventive interventions are a burning need.

Value-based, outcomes-oriented primary care practices look — and act — differently from today’s standard fee-for-service primary care practices. The team includes an array of practice extenders, such as diabetes educators, nutritionists, pharmacists, and health coaches. Carolinas Healthcare System’s Proactive Health practice is such a group, using cutting-edge health technology and coaching to ensure that patients are engaged, contributing members of the care team.

Proactive Health’s medical director, Dr. Greg Weidner, says the team doesn’t think in terms of patient visits. Instead, he says they “think about weaving health care into the fabric of patients’ lives.” Team members collaborate with patients and with each other, in person and with the help of technology centered around patient-specific plans and patient-generated data.

Much like a software development team, the health care team huddles, shares responsibility for all patients, and works in “sprints” (the ubiquitous hallmark of agile software development) with patients to achieve behavior change through short-cycle health action plans. The end goal is to activate patients to manage and eventually control their own health, as integral members of the care team.

Using coaching to engage patients

Patients are the most underutilized members of the care team, with family and friends a close second. Institutions like Penn Medicine are talking about “hacking primary care” to remove roadblocks to patient involvement and achieve quick success in changing behavior. They advocate for communicating with patients between visits using simple technology and devices, and having action plans geared toward helping patients understand and command their health.

Health coaching is lauded as part of the foundation for value-based care. While not yet a formal certification like nursing, it’s grounded in supporting, motivating, and celebrating patients where they spend the majority of their lives: in between office visits. In modern, value-based primary care, every team member has a responsibility to coach patients. Typically though, 80 percent of coaching comes from a single member of the care team, who is also responsible for communicating with other team members, including friends and family.

Does coaching work? Penn Medicine demonstrated that it does. In a yearlong proof-of-concept program geared toward its employees with high blood pressure, 91 percent of those with previously uncontrolled blood pressure reached their control targets within three months. At 12 months, 90 percent of patients continued to have their blood pressure under control, demonstrating the lasting impact of behavior change associated with this model of care.

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The movement toward value-based care

The goal of health care reform is to decrease the total cost of care. Successful organizations will do that and improve care.

Health systems are viewing their employees and beneficiaries as self-funded opportunities to perfect the art and science of high-performance primary care. Payers are becoming integrated delivery networks by aligning with provider groups to enhance primary care services for Medicare Advantage members. Independent direct primary care practices are springing up across the country to meet consumer demand for affordable, whole-person care, especially in areas where insurance choices have narrowed or grown more expensive. Wellness companies and on-site clinics serving self-insured employers are already using many of the tools needed to enact change quickly and conveniently.

The value-based care movement is landing at just the right time. As health care costs continue upward, there’s no choice but to disrupt age-old paradigms. The convergence of market forces, methodology, technology, and even philosophy on value-based care will generate health care’s uber-unicorn.

Chris Storer is chief marketing officer for Twine Health, a health technology company focused on helping providers and payers activate the health and well-being of patients through coordinated, collaborative care.

Until you account for the effects of obesity, US health outcomes relative to other countries are meaningless, and disingenuous as arguments for single-payer or really anything else. And no amount of healthcare delivery reforms with fix that.

Also, just because a study with one company, a few dedicates providers, and a handful of participants worked, does NOT translate to an economy-wide roll-out. Most policies do not scale from 1000 to 300 million, this one no exception.

Value generation in medicine comes only from a deep, trusting relationship with a personal, well trained clinician responsible for a reasonable number of patients. “Extenders” and “Teams”, when used appropriately can go far in leveraging that relationship. Unfortunately, they are actually utilized as “low cost” tools in an attempt to scale or replicate that relationship. They usually find themselves over extended. The resulting web of duplicative and contradictory treatment plans and recommendations results in increased contacts and costs rather than fewer.
Lots of “statistics” are published about the “benefits” of such systems. In actuality, the spend on healthcare continues to increase and most of the effort of “value-based” care organizations is on data management to capture more revenue rather that improving care. Once global spending caps are more generally in place, such as those found under the Medicare Advantage system, one will be able to objectively see what “value-based” systems are the most cost effective. When the tide goes out, you can see who is naked and who are wearing swimming suits.
Until then, I suggest you develop a long-term trusting relationship with your clinician and hold on tight.

This reads like marketing material for Twine Health, not an actual article. I believe that health coaches can be good for patients. But it doesn’t follow that capitation and managed care are the answer. And it certainly doesn’t make sense that because a coach can help a patient manage blood pressure — a fairly simple condition — that coaching can reduce health costs by a TRILLION DOLLARS!

Sounds like a prescription for disaster. Doctors given a meager lump sum per patient are incentivized to skimp on treatment to maximize their income. “Outcomes” is a relative term and data will be mainpulated – just like CEOs at large multi-nationals have done to earn ‘performance bonuses’ at the expense of corporate sustainability. The Agile software development framework is not the appropriate model to apply to people-centric care. Furthermore, how is encouraging Big Brother tactics to impose ‘behavior changes’ going to foster trust by patients in their doctors? Oops, doctors are no longer in charge – trust in the provider groups who are in thrall to insurers and employers?

Certainly this approach won’t work for everyone. But the current state is untenable. The US healthcare systems is the costliest in the world on a per-capita basis, 3X more costly than the UK, the highest performer among industrialized nations (US: $9.1k vs Britain $3.4k). Meanwhile, in terms of overall health, the US healthcare system ranks worst among our peers; 7 in 10 Americans struggle with uncontrolled chronic disease. Small changes and behavior modifications can help people get control of their conditions, with the help and support of their care team, family and friends. The simplicity of this argument doesn’t mean to treat the challenges as a foregone conclusion, but the planets seem to be aligning to make it possible.

“Here’s what I mean by true value-based care: fully capitated payment contracts in which a lump sum of money is available to treat a patient over the course of a year. ” If a physician runs out of money for treating you before the end of the year, what’s to prevent him or her from referring you to another provider instead of absorbing the cost of further treatment?

Fair point, Christopher. This scarcity of resources has been the ubiquitous knock on state-sponsored healthcare. That said, in this country, we spend far more for far worse outcomes. If patients are treating properly with preventative medicine, there’ll be substantial downstream cost savings from avoiding those cost procedures (not to mention the quality-of-life improvement). But I believe you’ve also got another point, of making sure physicians cooperate and collaborate.

This is clearly a sweeping change from how doctors and provider organizations work together today. There have been some bright spots for collaboration through ACOs and bundled payments, but these have largely just scratched the surface. In full-cap contracts there’s financial, business and philosophical alignment and patients are incentivized to use those networks. This is creating unlikely competition, and a path forward for a new model of care. If necessity is the mother of invention, then opportunity is the mother of innovation.